J.D. Edwards Plans Restructuring, Layoffs To Reduce Costs

Back-office software vendor J.D. Edwards (JDEC-Nasdaq) today unveiled a broad restructuring and said it is laying off more than 800 employees worldwide in an effort to cut costs and stimulate profits.

Recently returned CEO C. Edward McVaney says the company is undertaking a major restructuring of its business goals, "abandoning" its plans to host Internet marketplaces and exchanges, and remaking itself as an evangelist for complex collaborative data interchanges between businesses.

"I have been back at J.D. Edwards for six weeks," says McVaney, the company's one-time CEO who in April returned to the job after the abrupt resignation of Doug Massingill. "It is clear that we need a change of direction. We are adjusting all strategies to leverage the interoperability of our products and pursue business to business and the whole Internet economy."

The company's revenue is expected to be about the same for the first quarter of this year as it was during the same quarter last year, despite the fact that software license revenue grew more than 20%, he says. "It is clear that the company's cost structure is out of line with revenue. We want to drive expense out of the organization and establish a lower cost structure."

The layoffs, 242 of which are in customer training at the company's Denver headquarters, will greatly reduce the company's training staff around the world. McVaney says the company will focus on in-house training at customer sites, rather than classroom training at J.D. Edwards facilities.